Does budget accommodation have to be a crude representation of a more expensive alternative? I’m certain that the vast majority of hoteliers offering accommodation to budget conscious travelers would stridently suggest it doesn’t.

Appreciating that luxury hotels may offer guests a wider suite of products, services and amenities, many budget hotels enjoy enviable loyalty from their guests and consistently receive favourable feedback from them. Employees in these properties know and service their needs well and adopt administration processes that underpin the consistent delivery of the hotel’s ‘service promise’ to their guests.

The evolution of the sharing economy

Supporters of the sharing economy reference sharing platforms provide a quick, easy and affordable way to organise a range of peer-to-peer rentals, including booking a room, or a ride. Indeed, operators of ‘traditional hotels’ embrace the diversity of offer that room sharing has afforded guests and their hosts. In the owner’s case to capatalise on the unused capacity of their asset and, for the guest, to provide them with a greater diversity of accommodation offer that also supports tourism growth.

Governments within many jurisdictions around Australia are currently in various stages of addressing the growth of the home sharing economy. In doing so perhaps considering the appropriate regulatory balance that still enables a market to function (consumers meeting other consumers’ needs), yet also has sufficient regard to the consequences created by such exchanges.

The ‘experience’

An experience over the festive season, when assisting a friend to check into a ‘serviced apartment,’ reinforced to me why these concerns remain very valid.

Picture a balmy mid-summer afternoon in Melbourne’s Docklands precinct. A number of a-framed promotional boards are positioned at the base of near new residential apartment blocks, offering serviced apartment style accommodation. Confusion reigns supreme as vehicles pull up on the street. Passengers emerge carrying luggage, but few seem sure where to go. Most instinctively grab for their mobile phone to check for contact details of a person who may alleviate their rising concerns. Nearby, a visibly upset woman reveals that she is the care giver for a relative with a disability (evident in an obviously agitated state next to her). She has travelled from Adelaide, booked and paid for a five night stay. Her increasingly frantic phone calls go unanswered and recent feedback, evident online, indicates that she has likely become the victim of a scam.

Back to my friends, they are also confused, given the street address provided on their booking doesn’t match its apparent physical location. Fortunately, their third call made requesting assistance is answered. They are told they will be met, on the street, by a company representative within ten minutes. Nearby, would-be guests knock on building entrance doors, only to be told they are in the wrong location and will need to call the number on their reservation to confirm their exact meeting point.

Evidence of ‘portability’

My friends are then met and escorted to ‘reception’ – clearly the hastily reconfigured lounge area of a nearby apartment not currently in use. Signage, A4 in size and attached temporarily to the apartment wall with blu-tack, apparently reinforces the identity of the company with whom accommodation has been booked. Two laptop computers and a mobile EFTPOS terminal placed on a round dining table constitute the ‘reception desk.’ Keys to a number of apartments lie unsecured in an open plastic box, complete with dividers. Three A4 pages of booking conditions need to be read and signed. They include required payment of a $250 security deposit, which can only be refunded when guests are forwarded paperwork to complete (up to seven business days later). A request to process this refund on check out is met with confirmation that no one is available at that time. Instead, guests are instructed to leave apartment keys in the postbox and await receipt of paper work to complete.

Arriving at their room, in an adjacent non-connected building, it is apparent the apartment is brand new (tape still on doors and drawers of fridges). Rubbish left by the previous guest has left a pungent smell and the bedding configuration is not as it was described. No fire detection or prevention equipment is evident (the apartment has extensive cooking facilities), other than a hard-wired smoke detector, near the bedrooms. It is making an intermittent high pitched squeal. Two lengthy calls go unanswered, before my friends are finally told that issues are not will be resolved “in a couple of hours.”

When later checking online feedback, multiple previous guests highlight the non-return of their security deposit, frustration over a “confusing check-in process,” long delays in responding to maintenance requests and issues relating to room cleanliness. A common theme of ‘little care and little responsibility’ is emerging!

Commercial operation – residential setting

To me, this ‘experience’ depicted is a clear example of hosts with questionable motives operating a commercial operation in a residential setting.

A consistent policy position of TAA branches across the country has been to highlight an important distinction between hosts who may rent out the home in which they live for a few weeks a year and those operators who take advantage of regulatory ‘grey areas’ to operate such accommodation ‘businesses’ in residential buildings.

In 2018, TAA (Vic) will continue to work with Victorian parliamentarians with relevant portfolio responsibilities to highlight reasons why addressing the equitable regulation of sharing and traditional accommodation sectors should be a priority for them, in order to effectively address guest safety concerns; regulatory imbalances for similar asset classes; resident amenity issues; housing affordability and the fair application of taxes.